The things that are currently happening have a probability approaching zero.
In just one week, there were surprisingly three '6 standard deviation' (6-sigma) events.
– Bonds
– Silver$XAG
– Gold$XAU
We are living in a statistically 'impossible' situation.
Let me explain:
Last Tuesday, Japan's 30-year government bond recorded what is called a '6 standard deviation' trading period.
Two days ago, silver's performance was even more extreme: it reached 5 standard deviations during the rebound and then touched 6 standard deviations during the decline. This happened within a single trading day.
As for the current gold? It has risen 23% in less than a month. We are very close to another 6 standard deviation event.
Three 6 standard deviation events occurred within a week.
Quick explanation: in finance, we use 'standard deviation' (which we call Sigma) to measure the volatility of prices relative to the average.
1-sigma: unremarkable
2-sigma: common
3-sigma: starting to become rare
4-sigma: exceptional/anomalous
5-sigma: extremely rare
6-sigma: theoretically occurs once every 500 million days (about 1.37 million years)
Here are the 6 standard deviation level events we have seen before:
October 1987 crash, single-day drop of 22%
March 2020 COVID-19 crash
January 2015 Swiss franc surge
April 2020 WTI crude oil fell to negative values
But we have never seen three such events occur simultaneously in the same week.
Do you understand the main point?
6 standard deviation events are almost never triggered by simple macro news.
It almost always stems from market structure: excessive leverage, overly concentrated positions, margin calls, collateral issues, and forced selling or buying.
It's important to understand this because we are talking about the pressures and strains of internal mechanisms within the system.
As you know, the Japanese government bond market is at the core of the global financial system (I won't elaborate further), and a 6 standard deviation fluctuation in such a large market cannot be ignored.
Seeing silver exhibit a 6 standard deviation fluctuation again days later is very thought-provoking.
Now even gold is?? This is simply crazy.
Why are we seeing extreme statistical events across such different markets in just a few days?
When key pillars of global funding become unstable, leverage often contracts, and two things happen simultaneously: some assets are forced to be sold, while others are forced to buy protection.
Historically, precious metals are usually the beneficiaries.
Long-term interest rates reflect a country's credibility: that is, whether they can meet future debts without relying on large-scale inflation.
Precious metals reflect the credibility of the currency itself. When both become unstable at the same time, we are facing a challenge to the currency structure.
I'll stop here because I want to share the remaining part in another tweet tomorrow. But usually, when a system begins to fracture, adjustments will be extremely violent.
This is why multiple high standard deviation events occur in different asset classes in succession.
I will repeat: seeing three 6 standard deviation events occur in succession is extremely unusual.
Gold and silver are clearly telling you that we are experiencing a true paradigm shift.
Remember, I have accurately predicted every market top and bottom in the past 10 years.
When I have new actions, I will publicly share them here for everyone; that moment will come soon.
Many people will regret not paying attention to me sooner.